Trinidad and Tobago: Overview
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Influx of foreign investments drives rental market in Trinidad and Tobago
Trinidad and Tobago's rental market is buoyant, driven by foreign investments, particularly in the petrochemical industry. From an investment perspective it's a frustrating mix – attractive yields but significant buying costs and high rental income taxes.
GDP per capita is among the highest in the region at US$14,722).
Where plants have been built, as in Pt. Fortin and Pt. Lisa, rents have improved. Now the country is experiencing rapidly rising real estate prices.
“Prices are soaring – they are out of control. I don’t understand the market!” says Dawn Glaisher of Sea Jade Investments.
“I’ll give you an idea. There is a 400 acre lot here which was about US$10 million a year ago. Now buyers are fighting over it at US$20 million. There is another 80 acre piece of land which recently was valued at US$4 million. Suddenly he wants US$40 million – 10 times!”
The average price for coastal properties is US$2,600 per square meter (sq. m.), according to Global Property Guide research.
Outsiders can buy up to one acre for residential purposes without a license. However, a new law took effect in Tobago on 16 February 2007 known as the Foreign Investment (Tobago Land Acquisition) Order 2007. The Order states that foreigners must now obtain a license to acquire land for any purpose on the whole island of Tobago.
RENTAL YIELDS
Trinidad apartments generate good yields
Yields on apartments in North Trinidad average 7.78%, selling for US$3,158 per sq. m. Townhouses, on the other hand, are cheaper at roughly US$2,464 per sq. m with higher yields at 8.36%.
House prices are set according to the number of bedrooms. Prices start at US$400,000 for two-bedroom houses, and can reach up to almost US$1 million for houses with five bedroom or more. Yields are comparably lower at 7.6%, but are still good.
TAXES AND COSTS
Rental income tax is very high
Rental Income: Rental income is taxed at progressive rates from 25% to 30%.
Property: Land tax is imposed at around TT$10 (US$1.61) per acre of land, and building tax is levied at 7.5% of the property’s annual capital value.
Capital Gains: No capital gains tax is levied, except on properties sold within one year of acquisition.
Inheritance: There are no inheritance taxes in the islands.
Residents: Residents are taxed on world-wide income.
BUYING GUIDE
Buying costs range from moderate to high in Trinidad and Tobago
Roundtrip transaction costs range from 9% to 18.5% of the property's value. The wide variation is mainly due to stamp duty at 5% to 10% with the first TTD450,000 tax-exempt. The realtor’s fee is around 3% to 5% paid by the seller.
Buyer and seller pay for their own lawyer. Legal fees are at 0.5% - 1.5%, plus 15% VAT.
LANDLORD AND TENANT
In Trinidad and Tobago, law is pro-tenant
Rent Control: Rents can be freely agreed, except for very small rentals covered by the Rent Restriction Act.
Tenant Security: The landlord needs an eviction notice from the courts to evict a tenant. It takes an average of 192 days to evict a tenant in Trinidad and Tobago, according the the Lex Mundi project.
ECONOMIC GROWTH
Oil and gas production fuels economic growth
Trinidad and Tobago (pop. 1.3 million) has an ecological and geographical diversity that is truly unmatched in the Caribbean region.
Trinidad is a large and thriving island, its capital Port of Spain being densely populated, highly developed and industrialized.
Tobago is undeveloped and truly a natural paradise with its palm-lined sandy beaches, pristine coral reefs teeming with marine life, and lush rainforests.
The economy grew an average of 7.4% from 2000 to 2005. Growth of 10.1% is forecast for 2006.
Tourism is very important to the islands’ economic development. The government is promoting the islands as an ecotourism destination. Visitor numbers increased by 3.7% per year from 1999 to 2002.
Trinidad and Tobago merged in 1888 to form a single British colony, and became an independent member of the British Commonwealth in 1962. It finally became the Republic of Trinidad and Tobago in 1976
RESIDENTIAL PROPERTY AROUND THE WORLD
Asia & Pacific
Bubble fears prompt foreign ownership limits in China
America & Caribbean
The slowdown of the U.S. housing market
Middle East and Africa
Bahrain is open to foreigners and sizzling hot
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| RESIDENTIAL PROPERTY FACTS | |
| Price (sq.m): $3,174 For a 120 sq. m. property, usually an apartment. | Rental Yield: 6.83% For a 120 sq. m. property, usually an apartment. |
| Rent/month: $2,072 For a 120 sq. m. property. | Income Tax: n.a. Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income. |
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Roundtrip Cost:
13.2%
The total cost of buying and then reselling an apartment. Includes: * all transaction taxes and charges: * lawyers' and notaries' fees * agents' fees Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000. |
Cap Gains Tax: 0.0 Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation. |
| Landlord & Tenant Law: Pro-Tenant Rating is based on a detailed study of each country’s law and practice. | |
OCTOBER 2006
- Looking at the proposed licensing of the sale of land - Trinidad Express
- Market turbulent but? - Trinidad & Tobago Ex
SEPTEMBER 2006
- Chinese making own business - Trinidad & Tobago&rs
AUGUST 2006
- Tobago looks at Trinidad - Newsday
JULY 2006
- T&T dominates Caribbean trade - Jamaica Observer
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